IP telephony slips into the mainstream

Von Chee Sing

Today when an office worker picks up a call, in most cases he or she will have no idea if that call has come in via the Internet or via the traditional private branch exchange (PBX) system-and that"s how it should be.

These days the difference of a circuit-switched voice call and an IP-carried call are virtually indiscernible, and concerns over the quality of VoIP services have essentially vanished. The maturity of VoIP and the emergence of IP telephony (IPT) applications such as unified messaging have driven enterprises to converge data and voice communications onto a single IP-based network.

Gone are the days when voice and data demanded separate networks and administration teams. Convergence is today"s reality-both enterprises and service providers accept that IP networks are the future.

Not "if" but "when"

According to a recent Gartner report on IP Telephony: "It is now not a question of "if" IP telephony will be adopted but "when"."

The report further adds, "both VoIP and IP telephony are well along the maturity path and are moving toward what the research firm terms the "plateau of productivity." This is where adoption is strong and evident among mainstream users (Type B adoption, see chart). Mainstream users are classified as those that are typically not early adopters of new technology investments, but will commit to such technologies when clear ROI is proven and achievable.

Often VoIP and IP telephony are used as interchangeable terms, but they are different. VoIP is simply the carriage of voice traffic over an IP network, either the public Internet or a private IP network such as an IP-VPN. On the other hand, IP telephony is a set of converged communications technologies-including VoIP-featuring video conferencing, unified messaging and other applications allowed by a converged IP network.

One compelling reason for companies moving to IPT: traditional telephone systems are reaching a point where replacement is required. Most firms replacing legacy systems will invest in IPT given the better functionality, management and overall better price performance of running an IP network for all voice and data.

On average, a traditional PBX system has a life of eight years in Asia Pacific, according to Geoff Johnson, vice president of research for enterprise networks at Gartner. Given this, much of the equipment bought in preparation for Y2K is now likely to be evaluated in the coming 12 to 24 months.

Other key drivers for investment into IPT include relocation to a new site which allows the firm to take advantage of better infrastructure, and the opportunity to plan a greenfield site. Under such circumstances, the move to IPT is an obvious one.

Cost not the only driver

The HKSAR"s Office of the Government CIO (OGCIO), responsible for the IT administration of all government departments, implemented an IP network to carry both voice and data for its 250 staff at a new office at Cyberport. "Cost benefit analysis clearly showed that IP was a better option and ultimately more cost effective [than a traditional PBX]," said Victor Lam, chief systems manager at OGCIO.

The project was carried out by systems integrator, Jardine OneSolution (JOS) using Cisco equipment.

All voice traffic at the Cyberport site runs over IP and unified messaging has been integrated with the department"s existing Lotus Notes system. Lam added that further XML enhancements such as phone books, speed-dialing and call-forwarding have been implemented. Such features were unavailable to staff on the traditional system, he noted.

Johnson also notes that, after cost-cutting, better investment protection is a benefit that firms latch onto. But the most important factor driving the current wave of IPT investments is the gain in functionality and the resulting overall productivity. While lowering costs and simpler management have been the main arguments for many IPT projects, today the drive for business gain is a key tipping point for those holding the purse strings.

Gartner"s report further states that, "managers of IT should look for tangible benefits beyond just cost-savings for the IT budget [to] understand the needs of business units and identify how communications can benefit operations tactically."

"When voice and IP telephony become embedded into IT applications is where we see the biggest gain," said Johnson. For cases of migration from legacy systems to IP, this is crucial as "[making] the business case for an infrastructure upgrade to IP is often difficult, but a decision to radically improve customer service is usually easier to approve," added Johnson.

For Lam at OGCIO, business gain is evidenced by his citing of unified messaging as the most important gain in their IP move. "Colleagues can listen to all types of messages via their Notes at anytime and any place-that"s available to all 250 staff," he said.

The actual implementation of IPT is now considered quite straightforward, particularly in new site adoption of IPT but the management of the converged network is where some find difficulty.

For OGCIO, getting the required security for the voice traffic was a major consideration. Lam noted they were no longer working with a voice network which is physically secured, "so getting the tools and technology to ensure voice traffic is secured and separate from other data traffic was crucial," he said.

A minor annoyance in the beginning was intermittent voice quality degradation-attributed to the project being one of the first efforts in the region at integrating Lotus Notes with the IPT system, noted Callan Anderson, senior marketing manager for systems integration at JOS. Both Lam and Anderson noted the problem was not something typical or to be expected for all IPT projects.

Hong Kong scene

In Hong Kong, VoIP and IPT have been talked about for years, but have not taken off until the last year, noted Fredy Cheung, managing director for Hong Kong and Philippines operations at Cisco.

The rise in interest is attributed to global blue chip firms like Bank of America and Boeing who have installed enterprise-wide IPT systems. In Hong Kong, Cheung notes past implementations have been at universities or other early adopters of technology. "The last 12 months have seen a whole spectrum of finance, trading and logistics firms investing and using IPT," he added.

According to Timothy Mak, country director for Avaya Hong Kong and Taiwan region, Hong Kong companies have some unique requirements. The huge drive to do business in China has created a demand for cross-border communications and links. Many firms are connecting up to offices and operations on the mainland to enable more effective business, noted Mak.

On the domestic front, many businesses with multiple sites in Hong Kong now have a need to connect and integrate these sites onto a single communications network. IPT is an obvious option for those once the network is established.

While Hong Kong multinationals and those expanding across the region, now require an integrated communications network to facilitate better business.

Mak cited HK-based retailer Esprit, who recently deployed an IPT system for 1500 users to consolidate communications across the whole organization. "For Esprit it was business drivers creating the need for IPT-they required video conferencing and VoIP," he added.

Initially, companies can deploy VoIP at the trunk level where you save on basic international and long distance calls between multiple sites-this setup does not mean everyone has an IP phone. When VoIP reaches the end-user level, IPT applications such as unified messaging can be rolled out selectively or across the board using IP phones and soft phones (PC-based telephony).

Gartner stressed the need for CIOs or IT managers to implement IPT only where productivity benefits can clearly be articulated to business-unit sponsors. "A program of sponsorship requires that business units are educated in the productivity benefits that convergence brings," the Gartner report stated.

Migration headaches

For those considering migration, Lam at OGCIO notes firms need to consider if their existing network can support VoIP and IPT. Do they actually need the unified messaging and additional features and applications that IPT can offer?

"VoIP and IPT can be very cost-effective for firms with multiple sites and overseas regional presence," said Lam. For those without a regional presence then the consideration is down to cost savings and the benefits from the features like unified messaging, he added.

At Juniper Networks, the recommendation is a thorough assessment of costs and benefits before committing to a network upgrade. "With change, there is risk," said Peter Lam, product & solutions, marketing manager for greater China, Juniper. "There could be service outages or service degradation risks even with the perfect migration plan."

He further noted that for companies with a large installed base of legacy equipment, the move may take longer to implement and will likely incur costs while savings will emerge in the long term. The move also needs in-house IT expertise and resources, which may also be a barrier to many companies. "However, we believe the benefits for many businesses of adopting a converged network vastly outweigh the risks," said Juniper"s Lam.

OGCIO"s Lam stressed the need to look at in-house management skills and evaluate the need for additional help . "Managing IPT requires some new techniques," he added, "and some companies may need further assistance in acquiring these skills."

Lam at Juniper also noted firms migrating from legacy are likely to make the move gradually and in phases. All experts agree that systems integrators and service providers will have a key role to play in helping enterprises with limited IT resources. "However, in-house IT support is still crucial and necessary," said Lam

Mak at Avaya is keen to stress that enterprises must have a business strategy for IT managers taking on voice management over the long run. "New skills will be required as managing voice is different to simply managing conventional data traffic."

The emergence of service providers like PCCW and Hutchison in the provision of business VoIP and IPT services show there is an obvious demand for managed IPT services. And with offerings that now reach down to consumers and SOHO environments, IPT doesn"t need to get much more mainstream.